Adobe Australia drops SaaS tax dodge

Will apply local sales taxes to cloud services from now on

The world's ongoing efforts to get multinational technology companies paying and collecting the proper amount of tax has claimed another win, with Adobe advising it will add Australia's Goods and Services Tax (GST - think VAT, British readers and sales tax in North America) to the cost of its Creative Cloud.

Australia charges 10 per cent GST on most goods and services. But imports valued at less than AU$1,000 have been exempt from the tax, partly because it was felt too expensive to bother collecting it on physical goods. But digital goods are another matter entirely and Australia's government floated the idea of tech companies collecting GST from online purchases by Australians, no matter where the transaction takes place. Technology companies argued that they're exempt because their products are only consumed on Australian soil, rather than sold down under.

But Australia's cash-strapped government thought that argument is flimsy and therefore legislated to remove GST exemptions.

The answer is simple: Adobe's been told it has to collect GST, so is going to do so as of December 1st.

The company already collects sales taxes for digital goods in other jurisdictions, so this is not an entirely new state of affairs. But it is another small step towards making technology companies pay their way. It also means Adobe has thrown Australia a bone after previously admittingit overcharges for its products because it can. ®